Hong Kong approves license for city-state’s first crypto-lending platform
Crypto-lending platform PawnHub has become the first company to receive a license from the Government of Hong Kong, a license that will allow the firm to expand its crypto-lending services in the country. Following the receipt of the license, the firm now plans to partner with a leading US-based cryptocurrency custodian in a bid to offer insurance coverage on clients’ Bitcoin assets worth up to $100 million anywhere in the world.
The official press release stated,
“Crypto lending is fast becoming an integral part of the crypto ecosystem with PawnHub being the first regulated crypto lending firm to be based in Asia; home to some of the world’s biggest cryptocurrency nations, such as South Korea, Japan, China, Hong Kong and Singapore. The innovative business model of PawnHub brings to the Bitcoin community the best of both worlds, by allowing them to retain ownership of their crypto assets while having immediate access to liquidity.”
Crypto-lending platforms have seen growing demand from borrowers, with many wanting their loans denominated in terms of Bitcoin or other stablecoins pegged with fiat. There has also been a significant rise in the number of crypto-lending platforms, especially after the ICO boom of 2017.
BlockFi, a crypto-lending platform backed by investment funds Galaxy Digital and Winklevoss Capital, is today at the forefront of offering such services and according to CEO Zac Prince, the growth in lending activities reflected a “natural maturation” of financial services that are developing around the crypto-asset class. He added,
“Demand for products in the sector spans retail and institutional use cases for earning yield and accessing debt capital.”
The development in question comes a few months after Hong Kong’s securities watchdog, the Securities and Futures Commission [SFC], released a paper detailing a new licensing scheme for virtual asset exchanges. The agency also issued a warning to cryptocurrency-based Futures product providers who targeted Hong Kong citizens without proper paperwork.